In the face of success from Apple and Google in the portable device market, Microsoft is expected to announce "major organizational changes" in the company's Entertainment and Devices Division, responsible for Windows Phone, Zune and Xbox.

The first signs of major changes at Microsoft came last week, when Mary Jo Foley of ZDNet reported that J Allard, chief experience officer and chief technology officer of the Entertainment and Devices Division, was leaving the company. Allard's alleged dissatisfaction is believed to stem from Microsoft's canning of the dual-screen Courier tablet -- a secret project that he was head of.

This week, The Wall Street Journal also reported that Allard is expected to leave his position at Microsoft following the canceling of the Courier. But the changes go well beyond Allard, as reporter Nick Wingfield said that the entertainment and devices group -- which brought in $1.67 billion in sales in the first quarter of 2010 -- is expected to undergo a "shake up" from the Redmond, Wash., software giant. The changes, the report said, come "in the wake of increasingly bruising competition from Apple Inc. and Google Inc. in the market for consumer devices."

The forthcoming "major organization changes" will have an effect on the Windows Phone team, responsible for the new multitouch Windows Phone 7 mobile operating system set to launch this fall. Microsoft's presence in the smartphone business has become increasingly smaller as sales of Apple's iPhone and devices running the Google Android mobile operating system have grown.

"Microsoft's woes in mobile phones are particularly troubling for the company," Wingfield wrote. "Although it was an early player in the market for sophisticated wireless phones known as smartphones, Microsoft has stumbled badly in recent years with its Windows Mobile operating system for handsets."

Microsoft's Entertainment and Devices Division is also responsible for the Zune line of portable media players, most recently updated with the touchscreen Zune HD last September. Though the latest Zune received mostly positive reviews, it failed to counter Apple's iPod touch, which has seen tremendous sales growth even as the market for dedicated media players becomes cannibalized by multifunction devices like the iPhone.

In the face of success from Apple and Google in the portable device market, Microsoft is expected to announce "major organizational changes" in the company's Entertainment and Devices Division, responsible for Windows Phone, Zune and Xbox.

Great news! Let's hope that this results in compelling new stuff!

I like how Apple shakes things up. The cellphoone market was boring before Apple.

Microsoft has an advantage that Apple and Google do not, in that business is smitten with them.

I'm sure if they released a half decent smartphone that integrated well with all their enterprise servers, business would prefer their employees to use these.

The trouble they have through, it that phones are very personal to people, and people would rather choose their own. Of course, faced with a choice of free Microsoft phone from the boss, or your own phone that you pay for, a lot of people might choose the former.

Microsoft has an advantage that Apple and Google do not, in that business is smitten with them.

I'm sure if they released a half decent smartphone that integrated well with all their enterprise servers, business would prefer their employees to use these.

The trouble they have through, it that phones are very personal to people, and people would rather choose their own. Of course, faced with a choice of free Microsoft phone from the boss, or your own phone that you pay for, a lot of people might choose the former.

I would have loved to see what the Courier could do. Could be that they couldn't deliver on the concept...but it did look like a cool device and seems a poor decision by Microsoft to cancel it.

I suspect it was only ever Microsoft's equivalent of the Apple video from the 1980's called the 'Knowledge Navigator' and not even as far seeing given it was thee decades later. Simply a concept video. If Microsoft had any OS capabilities remotely close to that video I think we would have seen signs in current products at least, instead of what they have on the market, 20 year old junk.

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

I'd hate to see Microsoft monopolize another technology. They managed to seriously damage browser competition and progress with IE for many years. Till today, the browser market is unable to adhere to the many standards thanx to IE.

I would like to take a guess at the number one factor that caused this:

The iPad. The latest sales figures is spooking the he77 out of them, and they know that they can't waste another moment trying to figure out how they're going to compete for the long haul. The tossing out of Windows 7 out of the HP Slate, the Courier scrapped no doubt because it lacked a serious component inside Apple's devices. We're not even talking about iPhone 4 and so MS now has to go back to the drawing board. For real this time.

Apple has raised the bar so high, that Microsoft can no longer push the copy button and hope for success. You have to seriously engineer incredible hardware and tightly integrate it with spectacular software in order to even think about competing with Apple. And even then you'll need a vast software ecosystem to be competitive. Microsoft is seeing fallout from its very old business model of monkey see, monkey do. That no longer holds true in the mobile space, and software giant cesspool that is Microsoft is dying a slow painful death at the hands of Apple. Its about time actually.

I'd hate to see Microsoft monopolize another technology. They managed to seriously damage browser competition and progress with IE for many years. Till today, the browser market is unable to adhere to the many standards thanx to IE.

They also dominate the OS market, and via that, the application market. I'd like to see a return to the days when different platforms were all competing with each other. Microsoft has retarded the development of desktop computers for too long.

Nowadays, the choice is to use the normal, OK Microsoft world of infinite choices, or the Apple world of constrained choices with (maybe) a better platform, or Linux, which is better but burdened with more work and less choice of applications.

I like the fact that the mobile world is shaping up to have several good choices. I wonder if it will settle down like the desktop, with one dominant platform and a couple of tiny competitors.

You have to seriously engineer incredible hardware and tightly integrate it with spectacular software in order to even think about competing with Apple. And even then you'll need a vast software ecosystem to be competitive. ....That no longer holds true in the mobile space, and software giant cesspool that is Microsoft is dying a slow painful death at the hands of Apple. Its about time actually.

Microsoft is not dying any kind of death. Not slow and painful. Indeed, it is growing.

And the company that is best competing with Apple in the mobile space does NOT engineer hardware. Microsoft beat the pants off of Apple on the desktop, and they don't make computers. Android is starting to outsell the iPhone OS, and Google doesn't make phones.

In terms of ecosystem, Android has all the major apps, and many, many exclusive apps. Cases and accessories - The iPhone has everybody beat, but the Nexus One has better docks.

I don't think that anybody can predict which strategy will be best this time around, or whether any particular strategy is clearly a winner or a loser.

I like the fact that the mobile world is shaping up to have several good choices. I wonder if it will settle down like the desktop, with one dominant platform and a couple of tiny competitors.

I see the iPhone dominating the mobile space. It won't be as ubiquitous as the iPod for example, but it'll be close. Once the iPhone hits Verizon, say goodnight to WinMo, WebOS, and Nokia (at least in USA). RIM will coast via their established momentum (like Windows desktop OS does) but will not grow. Android and iPhoneOS will be the two games in town, period.

Microsoft is not dying any kind of death. Not slow and painful. Indeed, it is growing.

And the company that is best competing with Apple in the mobile space does NOT engineer hardware. Microsoft beat the pants off of Apple on the desktop, and they don't make computers. Android is starting to outsell the iPhone OS, and Google doesn't make phones.

In terms of ecosystem, Android has all the major apps, and many, many exclusive apps. Cases and accessories - The iPhone has everybody beat, but the Nexus One has better docks.

I don't think that anybody can predict which strategy will be best this time around, or whether any particular strategy is clearly a winner or a loser.

are you SteveAyo or whatever over at Engadget? Typical MS evangelist. Microsoft may not be "dying" but they are NOT growing. Everything the make is losing marketshare. Desktop OS, IE browser, Smartphone, MP3 player, etc. They are copycats at EVERYTHING and haven't been first-to-market with anything in the past decade.

MS beats the pants off Apple on the desktop? Based on sales alone, yes. Windows 7 is finally "nearly" as good as Leopard, and Leopard has been out for a year longer.

I see the iPhone dominating the mobile space. It won't be as ubiquitous as the iPod for example, but it'll be close. Once the iPhone hits Verizon, say goodnight to WinMo, WebOS, and Nokia (at least in USA). RIM will coast via their established momentum (like Windows desktop OS does) but will not grow. Android and iPhoneOS will be the two games in town, period.

Interesting ideas.

I see the iPhone having a small, but profitable market share - maybe 15 or 20 percent.

I think that WinPhone7 will immediately sell zillions of copies to enterprise users, and a good amount to non-ATT subscribers. Watch out RIM. They need to come up with new stuff fast to keep their installed base happy.

I think that Android will continue to grow FAST, and will take a huge market share. Probably the biggest. Probably dominating.

Nokia is stepping up to the plate - I would expect that they will gain market share here in the US. Even their old OS is outselling everyone else worldwide by a huge margin, and this installed base is prime selling territory.

Remember what Steve Balmer said immediately after the unveiling of the iPhone: So I kinda look at that, and I say I like our strategy, I like it a lot \

Yeah. I know this is said almost every time Microsoft F*cks up, but how is it that Balmer never gets to carry the can on stuff like this?

Allard is a bit dull and lacking of vision, but he did a pretty good job with the Zune and the other projects he was given. The Zune pretty much got it right on the second iteration but was far too late to the game given the age of the market. That wasn't really his fault, but Balmer's. The Courier was doomed from the start because, well ... it's just a stupid idea. But again, it's Balmer's fault that in the whole company, that was the best tablet they could drag out of their research division to counter the iPad.

Microsoft hasn't made a good move in five years at least. They've failed at almost every recent project and the company is shrinking and losing market share in all areas for the first time in it's history. When are they going to fire the guy that's actually responsible?

If there's a God in the universe I will be watching for the day when Steve Ballmer holds a developer conference and there's a giant screen behind him with Steve Jobs announcing Apple is "partnering" with Microsoft and will infuse a few million by purchasing non-voting shares.

I think that WinPhone7 will immediately sell zillions of copies to enterprise users, and a good amount to non-ATT subscribers.
Watch out RIM. They need to come up with new stuff fast to keep their installed base happy.
.....
Nokia is stepping up to the plate - I would expect that they will gain market share here in the US. Even their old OS is outselling everyone else worldwide by a huge margin, and this installed base is prime selling territory.

So RIMM have to come up with something fast to maintain their 'installed user base'
and yet,
Nokia can come to the market with their old OS and keep their market share (increase it in the US yet) because of Nokia's 'installed user base'. Not to mention the recent sacking of 90% of the decision makers and starting again.

I would like to take a guess at the number one factor that caused this:

The iPad. The latest sales figures is spooking the he77 out of them, and they know that they can't waste another moment trying to figure out how they're going to compete for the long haul. The tossing out of Windows 7 out of the HP Slate, the Courier scrapped no doubt because it lacked a serious component inside Apple's devices. We're not even talking about iPhone 4 and so MS now has to go back to the drawing board. For real this time.

Not to pile on...I can't help but think how many PC manufacturer's, software writers have been hurt by MicroSoft's inability to get their OS right! Not to mention the waste and effort to manage a crap OS like windows. Maybe Windows 7 is better but what damage has been done over the last few decades!

Ps. Anecdotal I know, my brother-in-law has gone through a PC laptop and two PC desktops in the last 4 years! All HP's (the latest ones running Vista). All from that bastion of quality, Costco. I on the other hand am still running my original intel MacBook and my original intel 20" iMac! Both on Snow Leopard!

I suggested he get his 17 year old daughter a MacBook...nope he bought her a piece of crap netbook....my daughter has upgraded version of a 13" MacBookPro! Oh well.

... I think that WinPhone7 will immediately sell zillions of copies to enterprise users, and a good amount to non-ATT subscribers. Watch out RIM. They need to come up with new stuff fast to keep their installed base happy. ...

You are preaching the sort of "accepted wisdom" here, but I'm not so sure it will be true this time.

While not being aimed at business per se, the iPhone has already made significant inroads into enterprise. I think it likely that the new iPhone 4 will be hugely more successful in that market than the original was, given it's design and the new OS. If rumours are true of Apple going multi-carrier in the USA, then we can also assume they will take a huge bite out of the subscribers of all the other networks. That kind of momentum (on top of the momentum they already have) will be hard to beat.

Overall, I think that what we are looking at with iPhone and the iPad is an entirely new platform taking shape. To me, that makes a lot of your analysis wrong-headed to the degree that it's based on past trends. Platforms are usually defined by the early market and iPhone OS dominates the early market. It's the standard that all others are striving towards and will be judged by. IMO iPhone OS won't ever be the entire market like Windows was in the desktop years, but there is no reason it can't dominate. People are just used to Apple having the minority share, there is no good reason why it has to be true anymore, especially in this new market.

The comparisons being made by analysts today to market share arguments from the desktop years may be quite misleading. At least for the time being, the traditionally Apple-owned "premium" segment of this market is actually the main segment. No one is going to make much money right now pushing "good enough" technology in the mobile market IMO. They are just filling up customers pockets until those customers eventually and inevitably buy their iPhones at some point down the road.

If there's a God in the universe I will be watching for the day when Steve Ballmer holds a developer conference and there's a giant screen behind him with Steve Jobs announcing Apple is "partnering" with Microsoft and will infuse a few million by purchasing non-voting shares.

Microsoft is not dying any kind of death. Not slow and painful. Indeed, it is growing.

And the company that is best competing with Apple in the mobile space does NOT engineer hardware. Microsoft beat the pants off of Apple on the desktop, and they don't make computers. Android is starting to outsell the iPhone OS, and Google doesn't make phones.

In terms of ecosystem, Android has all the major apps, and many, many exclusive apps. Cases and accessories - The iPhone has everybody beat, but the Nexus One has better docks.

I don't think that anybody can predict which strategy will be best this time around, or whether any particular strategy is clearly a winner or a loser.

I suspect there is a whole new generation coming along that simply won't even think of Microsoft when they think computers or phones. It will be a name from the past like PanAm or TWA that they heard their parents mention now and then.

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

You come to some very simple conclusions when the full reality is far more complex.

MS did not out compete Apple in a fair fight . There were a lot things going on that resulted in the way things ended up. Beginning with the fact that MS got the basis for the graphical user interfeace directly from Apple. There was a reason MS ended up in a huge antitrust case where the Department of Justice was contemplating breaking up the company.

Yes Android is going to outsell the iPhone. That has nothing to do with Android superiority or anything to do with people choosing Android over the iPhone. It has everything to do with buy one get one free.

Quote:

Originally Posted by Stevie

And the company that is best competing with Apple in the mobile space does NOT engineer hardware. Microsoft beat the pants off of Apple on the desktop, and they don't make computers. Android is starting to outsell the iPhone OS, and Google doesn't make phones.